Fapa, Baoxiniao, Metros-Bangwei have successively spent huge amounts of money to open specialty stores on Huaihai Road in Shanghai. This bustling commercial street has been jokingly referred to as —— “enter” meaning “loss”. Perhaps this is just temporary, but the high store rents and investment costs undoubtedly present a test for companies' strength. The Shanghai market is difficult to crack, so why do Wenzhou clothing brands go to such lengths to enter? Xiamon set up counters at the Henglong Plaza; Louis Shilan joined the first Baibanyuan department store. These are all high-end markets —— they are seizing the terminal end of Shanghai, this capital of fashion, allowing Wenzhou's clothing brands to connect with international standards. Marketing expert Larry Light said: “The future of marketing is the war of brands —— brand competition. The business world and investors will come to recognize that owning the market is far more important than owning a factory, and the only way to own the market is: possessing a brand with a market advantage.”
Market advantages ultimately manifest at the terminal end, reflecting consumer recognition and demand. Consumers' understanding of a brand comes partly from communication (including media communication and consumer word-of-mouth), and partly from the market (i.e., the terminal). To a large extent, the terminal market has complemented media communication, becoming an extension of the media war. More and more entrepreneurs have realized this point. Many well-known brands are painstakingly building their terminals, striving to present the best image and compete for consumers at the terminal end. Because products are ultimately sold to consumers through individual terminals. Even if your product quality is excellent and the price reasonable, if it doesn't pass the final consumer test, everything will be wasted. It’s like the last kick in football; only by scoring can all efforts pay off. Especially for clothing enterprises, while continuously expanding sales channels, it is necessary to strengthen the sales volume of individual stores. In the increasingly fierce brand competition, a brand must not only improve its product quality but also focus on the construction and maintenance of the terminal market.
In recent years, we can see some changes quietly occurring at the sales terminals: the shop windows of specialty stores are no longer just a promotional poster and a few stiff models. Emphasizing three-dimensionality and personalization, the shop windows have changed something; display cabinets are no longer simply stacking goods, emphasizing color, visual impact, and purchasing mood, the display cabinets are also showcasing images; products are no longer just simple clothes or pants, implementing full matching from top to bottom, series offering choices, perhaps less, but more refined; guides are no longer merely taking and selling, from appearance to service attitude to professional knowledge, service awareness needs to be established. This is further improvement and maintenance after the establishment of terminal channels, which not only includes hardware aspects (repair, display cabinets, goods, etc.), but should also include software aspects (specialty store image, service attitude, after-sales service, etc.).
Thinking about two cases: Pepsi and Coca-Cola vs Jianlibao Market War; Jianlibao had advertisements everywhere many years ago and was once called "miracle water", now it is almost forgotten by consumers. The two colas (Pepsi and Coca-Cola) that were once in a tripartite confrontation with Jianlibao have become the preferred drinks of consumers. The reasons for success and failure are multifaceted, but the most crucial one lies in the emphasis and construction of the terminal end —— After years of research and practice in sales channels, the two colas have developed a scientific and complete channel management method: Through services and monitoring of agents, distributors, retailers, and other links, products can be delivered promptly, accurately, and swiftly through various channels to retail terminals. The company also regularly investigates and visits retailers, collects information, and even the smallest details such as shelf length, number of product layers, order of different types of product placement, and shape of displays are clearly defined. At the same time, ensure that the two cola products are omnipresent to achieve the best sales effect. However, Jianlibao is often unseen in many places, and there is a clear lack of standardization in retail management. Retailers feel that the company does not provide them with any other services or support besides the products, making it difficult to reach a tacit understanding and promote each other. This undoubtedly manifests as an unsmooth product sales channel, either out of stock or unsold, with a very low coverage rate in the terminal market. Therefore, no matter how good the advertising is, it is futile. This is one of the reasons for the declining sales volume of Jianlibao products, ultimately leading to its failure in the war against the two colas.
The second case is the confrontation between Sibao and Procter & Gamble: Sibao Group's Sure gained a position to dialogue with the giant Procter & Gamble Group. In the mature stage of the Chinese shampoo market, giants like Procter & Gamble, Unilever, and Kao compete fiercely with each other. Whether in terms of resources, market position, or soft/hardware capabilities, Sibao Group has no apparent advantage, yet Sure achieved temporary success. Looking at this battle comprehensively, it boils down to a fight for the terminal end. Sibao did not follow the bombarding advertisement model of big companies like Procter & Gamble but instead focused its limited energy on occupying the terminal end, establishing cooperative operating funds, directly benefiting retailers, and arranging many promotional personnel and guides in malls. First, let Sure have a great chance to interact with consumers, then create a good reputation through quality products, and finally use this terminal force to pull the upper-level channels to sell Sure's products, quickly generating widespread influence. Reducing advertising investment and shifting the focus of investment to terminal costs to gain terminal advantages. Not only that, in major shopping malls, Sure always finds ways and spares no cost to seize the most conspicuous shelves. This kind of terminal momentum promotes sales growth.
Jianlibao lost at the terminal end, while Sibao won at the terminal end. We cite these two familiar examples precisely to show the importance of terminal construction in the present and future. Regardless of the comprehensive factors of Jianlibao's failure or whether Sure's success in this terminal battle is short-term, the "terminal" plays a pivotal role here. Especially for clothing enterprises, as multinational companies and international brands continue to flood into the Chinese market, new management and marketing concepts are also being introduced into the Chinese market.
Terminal congestion requires qualitative growth:
There are only two channels for brands to enter the terminal end: one is department stores, and the other is specialty stores. Wenzhou's clothing brands all attach great importance to terminal channel construction, laying out terminals in various regions and major malls across the country. After years of expansion operations, a brand may have over 100, 200, or even 400 specialty stores (or counters) nationwide, with a wide range of outlets and rapid speed, ranking among the top in the country. As the quantity of terminals increased, revenue once soared rapidly. But with the growing maturity of the clothing market in recent years, China's clothing industry has entered an era of brand operation advocating personalized concepts, and corresponding challenges have followed.
Firstly, in terms of terminal channels, entering high-end markets is difficult. This is a common feeling among many merchants. After joining the WTO, foreign clothing brands have flooded into the Chinese market. Their obvious advantages in fame, reputation, and company management levels have restricted domestic brands from entering high-end markets. For example, in some large high-end malls in Beijing and Shanghai, it is very difficult for domestic brands to secure a good location, and some malls only allow international brands to enter, leaving domestic brands unable to enter. On the other hand, renting specialty stores is costly, posing a challenge for general enterprises. This makes the terminal space extremely narrow, resulting in intense competition among domestic clothing brands, losing out in terminal occupation.
Under such circumstances, domestic clothing enterprises need to actively seek channels, improve brand tiers, and enter high-end markets. When high-end markets are dominated by foreign brands, some domestic brands like "White Collar" and "Yiwen" have already excelled and elevated their brands into high-end markets, gaining consumer recognition.
On the other hand, existing resources need to be fully utilized to increase single-store sales and enhance brand value-added. In recent years, many clothing enterprises in Wenzhou have seen no rapid sales growth as in previous years. Many brands face the awkward situation of failing to sustain sales growth. A relatively successful children's wear enterprise in Wenzhou complained that although overall sales increased last year, compared to the number of stores in previous years, single-store sales were declining. This is a problem that inevitably arises after terminal expansion reaches a certain level. At this point, we need to seek a new growth point, i.e., qualitative growth. Some international big brands place great emphasis on the construction of mall specialty stores and the maintenance of terminal customers. A comfortable shopping environment and star-rated service attitudes are channels to attract consumers.
This is precisely the terminal software construction we emphasize. In the early stages of market layout, hardware construction is often considered, while software aspects are overlooked. With a large influx of international brands into the Chinese market, we face more intense competition and learn from their advanced management and marketing concepts. ESPRIT's guide management manual has strict requirements for the dress code, behavior, and service norms of guides, having a relatively complete guide management system. Giordano regularly hires training companies to train its guides, including etiquette, store affairs, and displays. Many clothing enterprises (and other industries) attach great importance to guide training, with more standardized and successful companies having their own guide manuals. Bird of Joy held three rounds of store manager training camps in 2002, inviting experts for closed-door training to recharge franchisees and store managers. Guides are the ones who directly interact with customers and are the disseminators of brand philosophy. Enhancing the professional service knowledge of salespeople and agents is one of the most important parts of terminal construction. Good service can enhance the added value of a brand.
This is a completely new era of marketing. Winning happens at the terminal; losing happens at the terminal. From "two colas" to "white-collar", those who control the terminals control the world. A domestic marketing expert said: The success elements of a brand lie entirely outside the product; the competitive advantage between brands also manifests outside the product.